The Client
This client markets and sells promotionally sensitive “third-tier” pharmaceutical products to the high-prescribing primary care, cardiovascular, and specialist physician markets in the United States.
Background
The client is a small company that markets and sells prescription drugs for various diseases and wanted to continue their high level of growth. However, they were plagued with extremely high turnover rates among their Sales Representatives, a problem that was limiting their capacity to achieve their goals. While the rapid turnover of marginal performers didn’t necessarily concern them, the fact that they were also losing good people did. The firm’s goals were to:
- Continue their aggressive growth
- Generate additional revenue
- Penetrate new, high-prescribing medical centers
- Add 300 or more people to their sales team
- Reduce turnover rates
The Business Challenge
The firm encountered problems on a number of levels when hiring Sales Representatives. They wanted to aggressively expand their client base and, as a result, became less discerning about the Sales Representatives they hired to fill the vacancies in new and existing territories.
In addition, their turnover rate was very high. Sales Representatives receive very little in the way of base compensation and training, thereby making the cost of turnover manageable. However, while the actual percentage did not trouble them, they were concerned about losing many top performers.
The Vice President of Sales felt that, in order to understand the reasons for turnover, he needed to know what was happening out in the field. When he asked his Regional Directors and District Sales Managers their opinions on the problem, they told him that the firm just was not hiring the right people. They thought that establishing a benchmark for future hires would solve the problem.
When the firm contacted Caliper about doing a Top Performer Analysis, we felt there was more to the turnover issue than simply hiring the wrong people.
The Strategic Solution
After performing an in-depth needs analysis of the firm’s situation, it was determined that the best way to help them meet their goals was to construct a Competency Model for the Sales Representative position, conduct a Top Performer Analysis, and complete Three Sixty evaluations of their current District Sales Managers.
Caliper began this consulting project by partnering with the firm to identify the Sales Representatives who were top performers by setting specific performance criteria. It was determined that top-performing Sales Representatives had to be capable of developing new business by identifying high-prescribing primary care centers and physicians in their territories, setting appointments with these prospects, and closing consistently. Additionally, they had to closely follow the firm’s policies and procedures and demonstrate a willingness to adhere to the rules. They also had to maintain strong and profitable relationships with their current client base.
Caliper aligned the results of the Top Performer Analysis, developed from the aforementioned criteria, with the Competency Model. The combination of these elements gave the Regional Directors and District Sales Managers a more streamlined approach to identifying strong candidates and moving them through the hiring process. It also provided a benchmark that helped them quickly identify which candidates possessed the personality dynamics required for success as a Sales Representative.
A great deal more was learned through the use of feedback from the Three Sixty evaluations. Although the results were somewhat surprising, they were not entirely unexpected. The Sales Representatives overwhelmingly stated that their District Sales Managers displayed little understanding, support, or empathy when they ran into challenges.
Moreover, because of the firm’s focus on achieving its aggressive growth goals, the Sales Representatives did not feel that the firm valued them as contributors or saw the need for their training and development.
The Vice President of Sales, after reviewing the Three Sixty results, realized that immediate changes were needed. The firm decided to continue to develop Competency Models and benchmarks, and it also wanted to add executive coaching for Regional Directors and District Sales Managers. The Vice President of Sales then began to seek feedback from those in the field in order to identify the training and developmental needs required to achieve the firm’s growth goals.
This new management approach, along with ongoing executive coaching, enabled the Regional Directors and District Sales Managers to communicate more effectively with their Sales Representatives by displaying more empathy for their needs and providing better training and development programs. In addition, turnover rates were reduced, and the firm stayed on track in meeting its growth goals, built benchmark strengths, provided internal opportunities for career advancement, and fostered a more supportive culture that emphasized training and development.
The Result
Once the benchmark and Competency Model were established and managers were educated on how to use them during the hiring process, they became a guideline for hiring Sales Representatives. In addition, a targeted interview process was designed to help the firm screen prospective Sales Representatives early on in the hiring process. Each person who made it through the first interview was then given the Caliper Profile. The results were compared to the benchmark, and, if any deficiencies were apparent, they became the basis for additional questions in follow-up interviews.
In addition, ongoing Three Sixty evaluations of Regional Directors and District Sales Managers ensure that they are giving their Sales Representatives the support and training they need to be successful as well as helping them to feel valued for their individual contributions. This consulting project was a critical step in helping the firm meet its aggressive financial goals. By focusing on the qualities that distinguish their top performers and then using the benchmark to help identify high-potential job candidates, they have been able to reduce both turnover rates and ramp-up time for new hires. In addition, their sales force has become more effective in developing profitable relationships in their individual markets.
Caliper is currently working with the firm to conduct Top Performer Analyses for other critical roles and is continuing to deliver annual Three Sixty evaluations to ensure that Regional Directors and District Sales Managers are keeping open lines of communication with their direct reports and displaying the managerial skills necessary for developing their sales talent. As an added benefit, ongoing executive coaching is providing the members of the management team with an opportunity to continue their personal and professional development, while simultaneously achieving the firm’s profitability goals.